Conversica Study Reveals How Auto Dealers Can Improve Service Department Results

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Our annual report offers a snapshot of how dealerships are handling leads today and how real-world execution compares with best-practice research.

Conversica, the leader in conversational AI for business, today announced new findings from its 2017 Sales Effectiveness Report on Lead Follow-Up in the Automotive Industry. This year’s report distinguishes between auto sales and service departments and provides an objective analysis of how well dealerships are putting the “4 Ps” —promptness, personalization, persistence and performance—into practice when following up with leads.

Automotive Industry Still ‘Leads’ the Pack

This year’s report showed a decline in the proportion of “A” grades that automotive dealerships received—from 31 percent in 2016 to 20 percent in 2017—largely due to a smaller percentage of auto dealerships receiving “A” grades in the promptness category, but, overall, the auto industry still out-performed other industries in sales lead follow-up. Of the nine industries examined, automotive had by far the highest proportion of top scores:

●    30 percent of auto sales departments received an overall “A” grade–the highest for any industry surveyed by far; less than 2 percent of non-automotive companies received an “A”

●    28 percent of sales departments and 23 percent of service departments responded to inquiries within five minutes—the optimal window for qualification and conversion

●    Over 43 percent of sales departments that responded made eight or more attempts

More than three-quarters (81 percent) of dealerships that responded also utilized all four key elements of personalization in their response: personalized greeting, specific mention of the lead’s inquiry, inclusion of specific contact information, and time patterning (responses occurring at a time of day similar to the inquiry).

But Service Departments Are a Weak Link

The vast majority (82 percent) of car buyers who receive service at a dealership will buy their next car from that dealership. Furthermore, with an average 72 percent gross revenue margin, auto service is the most profitable department of most dealerships.

And yet, the study revealed that while auto sales performed exceptionally well, service departments showed some room for improvement:

●    20 percent of service departments failed to respond to a direct, specific inbound inquiry

●    Only 10 percent of service departments that responded made eight or more attempts

●    Over two-thirds (68 percent) of service departments gave up after one or two attempts

●    Only 6 percent of service departments scored an overall “A” grade

“Our annual report offers a snapshot of how dealerships are handling leads today and how real-world execution compares with best-practice research,” said David Marod, Automotive Industry General Manager at Conversica. “The auto industry continues to perform well at lead follow-up, but our research reveals that service departments are not performing as well as sales departments. Given how critical service departments are to long-term customer retention, dealerships would be wise to make all of the four key lead follow-up practices a priority. This is something that our AI assistants are purpose-built to accomplish.”

AI to Power the Future of Auto Sales and Service

A leading provider to more than 800 auto dealers around the world, including large dealership groups such as MileOne Autogroup, Galpin Motors and the Faulkner Organization, Conversica provides a cloud-based artificial intelligence service that presents itself as a sales or service assistant. This assistant reaches out to internet sales and service leads and engages each of them in a human-like conversation.

With a response rate often three to five times higher than marketing or sales emails, Conversica’s assistants significantly increase the number of quality conversations with potential and future customers and reduce the time salespeople, BDC reps and service advisors spend chasing leads. From more conversations come more showroom and service drive visits and, as a result, more dealership revenue.

Report Availability

To obtain a copy of Conversica’s 2017 Sales Effectiveness Report on Lead Follow-Up in the Automotive Industry, submit a request here. To ask that your company or dealership be included in a future report, as did more than 100 companies last year, visit http://www.conversica.com/4ps-assessment-request.

Survey Methodology

Commissioned researchers submitted inquiries on the websites of 866 companies from nine industries, 124 of which were in the automotive industry, and measured the promptness, persistence, personalization and performance of the responses. Companies were selected by compiling rankings from sources such as Forbes, Bloomberg and industry-specific publications. This research was conducted over a one-month period, using different secret shopper personas to solicit contact from the companies surveyed.

About Conversica

Conversica is the leader in AI-powered business conversations and the only provider of AI-driven lead engagement software for marketing and sales organizations. The flagship Conversica® AI Sales Assistant helps companies find and secure customers more quickly and efficiently by automatically contacting, engaging, qualifying and following up with leads via natural, two-way conversations. Used by more than 1,000 companies worldwide, Conversica’s sales assistants are built on a proven AI platform integrating natural language processing (NLP), natural language generation (NLG), and machine learning (ML) capabilities and engage prospects over multiple communication channels and in multiple languages. Recognized by Gartner as a Cool Vendor, Conversica is a portfolio company of Providence Equity, Kennet Partners and Toba Capital and is headquartered in Foster City, Calif.

To learn more, visit conversica.com and follow the company on Twitter, LinkedIn and Facebook.

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